Introduction

An agreement effective November 1, 1993, between
the United States and Luxembourg improves Social Security protection for
people who work or have worked in both countries. It helps many people
who, without the agreement, would not be eligible for monthly retirement,
disability or survivors benefits under the Social Security system of one
or both countries. It also helps people who would otherwise have to pay
Social Security taxes to both countries on the same earnings.

The agreement covers Social Security taxes (including the U.S. Medicare
portion) and Social Security retirement, disability and survivors insurance
benefits. It doesn’t cover benefits under the U.S. Medicare program
or the Supplemental Security Income (SSI) program.

This document covers highlights of the agreement and explains how it
may help you while you work and when you apply
for benefits.

The agreement may help you, your
family and your employer

While you work––If your work is covered by
both the U.S. and Luxembourg Social Security systems, you (and your
employer, if you are employed) would normally have to pay Social Security
taxes to both countries for the same work. However, the agreement
eliminates this double coverage so you pay taxes to only one system
(see
the section on "Coverage and Social Security taxes").

When you apply for benefits––You may have some
Social Security credits in both the U.S. and Luxembourg but not have
enough to be eligible for benefits in one country or the other. The
agreement makes it easier to qualify for benefits by letting you add
together your Social Security credits in both countries. For more details,
see the section on"Monthly benefits".

Coverage and Social Security taxes

Before the agreement, employees, employers and
self-employed people could, under certain circumstances, be required to
pay Social Security taxes to both the United States and Luxembourg for
the same work.

Under the agreement, if you work as an employee in the United States,
you normally will be covered by the United States, and you and your employer
will pay Social Security taxes only to the United States. If you work
as an employee in Luxembourg, you normally will be covered by Luxembourg,
and you and your employer pay Social Security taxes only to Luxembourg.

On the other hand, if your employer sends you from one country to work
for that employer or an affiliate in the other country for five years
or less, you will continue to be covered by your home country and you
will be exempt from coverage in the other country. For example, if a U.S.
company sends an employee to work for that employer or an affiliate in
Luxembourg for no more than five years, the employer and the employee
will continue to pay only U.S. Social Security taxes and will not have
to pay in Luxembourg.

If you are self-employed and reside in the United States or Luxembourg,
you generally will be covered and taxed only by the country where you
reside.

NoteIn addition to old-age, retirement, survivors
and disability benefits, Luxembourg Social Security taxes cover several
other programs including sickness and workers’ compensation insurance
as well as family allowances. As a result, workers exempted from Luxembourg
Social Security coverage by the agreement pay no Social Security taxes
for these programs and generally cannot receive benefits from them. If
the agreement exempts you from Luxembourg coverage, you and your employer
may wish to arrange for alternative benefit protection.

Summary of agreement rules

The following table shows whether your work
is covered under the U.S. or Luxembourg Social Security system. If you
are covered under U.S. Social Security, you and your employer (if you
are an employee) must pay U.S. Social Security taxes. If you are covered
under the Luxembourg system, you and your employer (if you are an employee)
must pay Luxembourg Social Security taxes. "Certificate of coverage" section explains how to get a form from the country where you are covered
that will prove you are exempt in the other country.

NoteAs the table indicates, a U.S. worker employed
in Luxembourg can be covered by U.S. Social Security only if he or she
works for a U.S. employer. A U.S. employer includes a
corporation organized under the laws of the United States or any state,
a partnership if at least two-thirds of the partners are U.S. residents,
an individual who is a resident of the U.S. or a trust if all the trustees
are U.S. residents. The term also includes a foreign affiliate of a U.S.
employer if the U.S. employer has entered into an agreement with the Internal
Revenue Service under section 3121(l) of the Internal Revenue Code
to pay Social Security taxes for U.S. citizens and residents employed
by the affiliate.

Certificate of coverage

A certificate of coverage issued by one country serves as proof of
exemption from Social Security taxes on the same earnings in the other
country.

Certificates for employees

To establish an exemption from compulsory coverage
and taxes under the Luxembourg system, your employer must request a certificate
of coverage (form USA/LUX 1) from the U.S. at this address:

If preferred, the request may be sent by FAX to (410) 966-1861.
Please note this FAX number should only be used to request certificates
of coverage.

No special form is required to request a certificate but the request
must be in writing and provide the following information:

Full name of worker (including maiden name for married woman);

Date and place of birth;

Citizenship;

Country of worker's permanent residence;

U.S. Social Security number;

Date of hire;

Country of hire;

Name and address of the employer in the U.S. and Luxembourg; and

Date of transfer and anticipated date of return.

In addition, your employer must indicate if you remain an employee of
the U.S. company while working in Luxembourg or if you become an employee
of the U.S. company’s affiliate in Luxembourg. If you become an
employee of an affiliate, your employer must indicate if the U.S. company
has an agreement with the Internal Revenue Service under section 3121(l)
of the Internal Revenue Code to pay U.S. Social Security taxes for U.S.
citizens and residents employed by the affiliate and, if yes, the effective
date of the agreement.

Your employer can also request a certificate of U.S. coverage for you
over the Internet using a special online request form available at www.socialsecurity.gov/coc. Only an employer can
use the online form to request a certificate of coverage. A self-employed
person must submit a request by mail or fax.

To establish your exemption from coverage under the U.S. Social Security
system, your employer in Luxembourg must request a certificate of coverage
(form LUX/USA 1) from Luxembourg at this address:

The same information required for a certificate of coverage from the
United States is needed to get a certificate from Luxembourg except that
you must show your maiden name, if you are a married woman, and your Luxembourg
Social Security number rather than your U.S. Social Security number.

Certificates for self-employed
people

If you are self-employed and would normally
have to pay Social Security taxes to both the U.S. and Luxembourg systems,
you can establish your exemption from one of the taxes by writing to:

if you reside in the United States, the U.S. Social Security Administration
at the address in "Certificates for employees" section; or

Effective date of coverage
exemption

The certificate of coverage you receive from
one country will show the effective date of your exemption from paying
Social Security taxes in the other country. Generally, this will be the
date you began working in the other country.

Certificates of coverage issued by Luxembourg should be retained by the
employer in the United States in case of an audit by the Internal Revenue
Service (IRS). No copies should be sent to IRS unless specifically requested
by IRS. However, a self-employed individual must attach a photocopy
of the certificate to his or her income tax return each year as proof
of the U.S. exemption.

Copies of certificates of coverage issued by the United States will be
provided for both the employee and the employer. It will be their responsibility
to present the certificate to the Luxembourg authorities when requested
to do so. To avoid any difficulties, your employer (or you, if you are
self-employed) should request a certificate as early as possible, preferably
before your work in the other country begins.

If you or your employer request a certificate of coverage, you should
read the Privacy Act and Paperwork Reduction Act Statements below.

Authority to collect information for a certificate
of coverage

Privacy Act

The Privacy Act requires us to notify you that we are authorized
to collect this information by section 233 of the Social Security
Act. While it is not mandatory for you to furnish the information
to the Social Security Administration (SSA), a certificate of
coverage cannot be issued unless a request has been received.
The information is needed to enable SSA to determine if work should
be covered only under the U.S. Social Security system in accordance
with an international agreement. Without the certificate, work
may be subject to taxation under both the U.S. and the foreign
Social Security systems.

Paperwork Reduction Act Notice

This information collection meets the clearance requirements
of 44 U.S.C. section 3507, as amended by section 2 of the Paperwork
Reduction Act of 1995. You are not required to answer these questions
unless we display a valid Office of Management and Budget (OMB)
control number. We estimate that it will take you about 30 minutes
to read the instructions, gather the necessary facts, and write
down the information to request a certificate of coverage.

Monthly benefits

The following table shows the various types
of Social Security benefits payable under the U.S. and Luxembourg Social
Security systems and briefly describes the eligibility requirements that
normally apply for each type of benefit. If you don’t meet the normal
requirements for these benefits, the agreement may help you to qualify
(see "How benefits can be paid" section).

This table is only a general guide. You can get more specific information
about U.S. benefits here on our web site or at any U.S. Social Security
office or by calling our toll-free number at 1-800-772-1213. You can get more detailed information about the Luxembourg system by writing
to the Luxembourg address in "For more information" section or by visiting
the Luxembourg Social Security system website at www.mss.public.lu/.

Under U.S. Social Security, you may earn up to four credits each year
depending on the amount of your covered earnings. For example, in 2005,
you get one credit for each $920 of your covered annual earnings up to
a maximum of four credits for the year. Under the Luxembourg system, credits
are measured in months. To simplify the information in the table, requirements
are shown in years of credits.

Monthly benefits and eligibility requirements

Retirement or old-age benefits

United States

Luxembourg

Worker-Full
benefit at full
retirement age, or reduced benefit as early as age 62.
Required work credits range from one and one-half to 10 years (10
years if 62 in 1991 or later).

Worker-Age 65, with
at least 10 years of coverage; age 60 with 40 years of coverage including
compulsory, voluntary and certain types of noncontributory periods
(e.g., periods of education, child-rearing, etc.); or age 57 with
40 years of compulsory coverage.

Disability benefits

United States

Luxembourg

Worker-Under full
retirement age can get benefit if unable to do any substantial
gainful work for at least a year. One and one-half to 10
years credit needed, depending on age at date of onset. Some
recent work credits also needed unless worker is blind.

Worker-Under age
65 can get benefit if unable to work for a prolonged period in last
occupation or similar occupation. Twelve months of contributions
in the three-year period prior to disability onset needed. If currently
working in covered employment, the 12-month requirement is waived
if disability is due to work accident or disease.

Family
benefits to dependents of retired or disabled people

United States

Luxembourg

Spouse-Full benefit
at full
retirement age or at any age if caring for the worker's entitled
child under age 16 (or disabled before age 22). Reduced benefit
as early as age 62 if not caring for a child.

Spouse-No
provision.

Divorced Spouse-Full
benefit at full
retirement age. Reduced benefit as early as age 62.
Must be unmarried and have been married to worker for at least 10
years.

Divorced Spouse-No
provision.

Children-If
unmarried, up to age 18 (age 19 if in an elementary or secondary school
full time) or any age if disabled before age 22.

Children-No
provision.

Survivors
benefits

United States

Luxembourg

Widow or widower-Full
benefit at full
retirement age or at any age if caring for the deceased's entitled
child under age 16 (or disabled before age 22). Reduced
benefit as early as age 60 (or age 50 if disabled) if not caring for
child. Benefits may be continued if remarriage occurs after
age 60 (or age 50 if disabled).

Widow or widower-At
any age if not remarried. Generally, must have been married to the
worker for at least one year prior to the worker’s death or
retirement. Other conditions may apply if worker was already receiving
a pension at the time of the marriage. Worker must have 12 months
of contributions in the last 36 months prior to death, or have
died from a work accident or disease, or have been receiving a retirement
or disability benefit.

Divorced widow
or widower-Same as widow or widower if marriage lasted at
least 10 years.

Divorced widow
or widower- Same as widow or widower. Benefit amount varies
depending on the length of marriage.

Children-Same
as for children of retired or disabled worker.

Children-Under
age 18 (age 27 if a full-time student) or any age if disabled.
Worker must have 12 months of contributions in the last 36 months
prior to death; or have died from a work accident or disease, or have
been receiving a retirement or disability benefit.

Lump-Sum Death
Benefit-A one-time payment not to exceed $255 payable on
the death of an insured worker.

Funeral Grant-A
lump-sum is paid by the sickness fund for a pensioner, covered worker
or family member.

How benefits
can be paid

If you have Social Security credits in both
the United States and Luxembourg, you may be eligible for benefits from
one or both countries. If you meet all the basic requirements under one
country’s system, you will get a regular benefit from that country.
If you don’t meet the basic requirements, the agreement may help
you qualify for a benefit as explained below.

Benefits from the U.S.––If you don’t have enough work credits
under the U.S. system to qualify for regular benefits, you may be able
to qualify for a partial benefit from the United States based on both
U.S. and Luxembourg credits. However, to be eligible to have your Luxembourg
credits counted, you must have earned at least six credits (generally
one and one-half years of work) under the U.S. system. If you already
have enough credits under the U.S. system to qualify for a benefit, the
United States cannot count your Luxembourg credits.

Benefits from Luxembourg––Social Security credits from both countries
can also be counted, when necessary, to meet the eligibility requirements
for Luxembourg benefits. To be eligible to have your U.S. and Luxembourg
credits counted, you must have at least 12 months of coverage credited
under the Luxembourg system.

How credits get counted

You don’t have to do anything to have your
credits in one country counted by the other country. If we need to count
your credits under the Luxembourg system to help you qualify for a U.S.
benefit, we will get a copy of your Luxembourg record directly from Luxembourg
when you apply for benefits. If Luxembourg officials need to count your
U.S. credits to help you qualify for a Luxembourg benefit, they will get
a copy of your U.S. record directly from the Social Security Administration
when you apply for the Luxembourg benefit.

Although each country may count your credits in the other country, your
credits are not actually transferred from one country to the other. They
remain on your record in the country where you earned them and also can
be used to qualify for benefits there.

Computation of U.S. benefit
under the agreement

When a U.S. benefit becomes payable as a result
of counting both U.S. and Luxembourg Social Security credits, an initial
benefit is determined based on your U.S. earnings as if your entire career
had been completed under the U.S. system. This initial benefit is then
reduced to reflect the fact that Luxembourg credits helped to make the
benefit payable. The amount of the reduction will depend on the number
of U.S. credits: the more U.S. credits, the smaller the reduction; and
the fewer U.S. credits, the larger the reduction.

A Luxembourg pension may affect your U.S. Benefit

If you qualify for Social Security benefits from
both the United States and Luxembourg and you didn’t need the agreement
to qualify for either benefit, the amount of your U.S. benefit may be
reduced. This is a result of a provision in U.S. law which can affect
the way your benefit is figured if you also receive a pension based on
work that was not covered by U.S. Social Security. For more information, call our toll-free number, 1-800-772-1213, and get the publication, Windfall Elimination Provision (Publication
No. 05-10045). If you are outside the United States, you may write to us
at the address in "For more information" section.

What you need to know about Medicare

Medicare is the U.S. national health insurance
system for people age 65 or older or who are disabled. Medicare has two
parts: hospital insurance (also called "Part A" Medicare) and medical
insurance (called "Part B" Medicare). You are eligible for free hospital
insurance at age 65 if you have worked long enough under U.S. Social Security
to qualify for a retirement benefit. People born in 1929 or later need
40 credits (about 10 years of covered work) to qualify for retirement
benefits.

Although the agreement between the United States and Luxembourg allows
the Social Security Administration to count your Luxembourg credits to
help you qualify for U.S. retirement, disability or survivor benefits,
the agreement doesn’t cover Medicare benefits. As a result, we cannot
count your credits in Luxembourg to establish entitlement to free Medicare
hospital insurance.

For more information about Medicare, call our toll-free number,
1-800-772-1213, and ask for the publication, Medicare
(Publication No. 05-10043) or visit Medicare’s website at www.medicare.gov.

Claims for benefits

If you live in the United States and wish to
apply for U.S. or Luxembourg benefits:

If you live in Luxembourg and wish to apply for U.S. or Luxembourg benefits,
contact:

the Federal Benefits Unit at the U.S. Embassy in Brussels, Belgium,
(phone 32-2-508-2388) to file for U.S. benefits; or

any Luxembourg Social Security office to file for Luxembourg benefits.

You can apply with one country and ask to have your application
considered as a claim for benefits from the other country. Information
from your application will then be sent to the other country. Each country
will process the claim under its own laws—counting credits from
the other country when appropriate—and notify you of its decision.

If you haven’t applied for benefits before, you may need to provide
certain information and documents when you apply. These include the worker’s
U.S. and Luxembourg Social Security numbers, proof of age for all claimants,
evidence of the worker’s U.S. earnings in the past 24 months, and
information about the worker’s coverage under the Luxembourg system.
You may wish to call the Social Security office before you go there to
see if any other information is needed.

Payment of benefits

Each country pays its own benefit. U.S. payments
are made by the U.S. Department of Treasury each month and cover benefits
for the preceding month. Payments under the Luxembourg system are made
near the end of each month for the next month.

Absence from U.S. territory

Normally, people who are not U.S. citizens may
receive U.S. Social Security benefits while outside the U.S. only if they
meet certain requirements. Under the agreement, however, you may receive
benefits as long as you reside in Luxembourg regardless of your nationality.
If you are not a U.S. or Luxembourg citizen and live in another country,
you may not be able to receive benefits. The restrictions on U.S. benefits
are explained in the publication,Your
Payments While You Are Outside The United States(Publication
No. 05-10137).

Appeals

If you disagree with the decision made on your
claim for benefits under the agreement, contact any U.S. or Luxembourg
Social Security office. The people there can tell you what you need to
do to appeal the decision.

The Luxembourg Social Security authorities will review your appeal if
it affects your rights under the Luxembourg system, while U.S. Social
Security authorities will review your appeal if it affects your rights
under the U.S. system. Since each country’s decisions are made independently
of the other, a decision by one country on a particular issue may not
always conform with the decision made by the other country on the same
issue.

For more information

To file a claim for U.S. or
Luxembourg benefits under the agreement, follow the instructions in "Claims for benefits" section.

To find out more about U.S. Social Security benefits or for information
about a claim for benefits, contact any U.S. Social Security office or
call our toll-free number at 1-800-772-1213. If you live outside
the United States, write to:

Important Information:

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Disclaimer

The Social Security Administration (SSA) website contains links to websites not affiliated with the United States government. These may include State and Local governmental agencies, international agencies, and private entities.

SSA cannot attest to the accuracy of information provided by such websites. If we provide a link to such a website, this does not constitute an endorsement by SSA or any of its employees of the information or products presented on the non-SSA website.

Also, such websites are not within our control and may not follow the same privacy, security or accessibility policies. Once you visit such a website, you are subject to the policies of that site.